CalMac seeks to win back Northern Isles ferries for public sector

CalMac is to attempt to bring Orkney and Shetland ferries back into public hands, The Scotsman has learned.

A Calmac ferry. Picture: TSPL
A Calmac ferry. Picture: TSPL

The Scottish Government-owned west coast ferry operator has formally expressed interest in taking back control of NorthLink Ferries.

CalMac lost the contract in 2012 to private sector Serco, who in turn unsuccessfully bid for CalMac two years ago.

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Ministers would like to see a public sector operator for NorthLink, and have already approached CalMac to mount a bid for the next ScotRail train operating contract In May, the then transport minister Humza Yousaf said he had been prevented by European law from appointing a public sector operator for NorthLink. He also said most islanders wanted the contract to go out to competition.

The next battle for control of NorthLink ferries will start next month. Picture: Serco

The £370 million, eight-year contract – principally Aberdeen-Kirkwall-Lerwick – will start in November next year.

In April, Serco was awarded an 18-month extension to its contract, but it is understood this cannot be extended again.

The Scottish Government’s Transport Scotland agency, which is running the contest, would not say how many other firms had expressed interest.

Stena Line refused to comment, while P&O said it had not lodged interest.

A shortlist of those to be invited to submit bids is expected around the New Year.

Orkney-based ferry expert Dr Alf Baird said CalMac could have the edge because it didn’t need to provide dividends to private shareholders.

The former professor of maritime business at Edinburgh Napier University said: “CalMac could offer a lower profit margin than Serco.”

However, he said there was little scope for innovation because the existing ships would be used. He also said there would be little benefit to the operator from planned fare cuts because the ferries were already full in summer.

A CalMac spokesman said: “I can confirm CalMac Ferries Ltd has submitted a European single procurement document confirming its interest in progressing a bid for the Northern Isles contract.

“We look forward to taking part in the tender process.”

A Serco spokesman said: “We have submitted our expression of interest.”

A Transport Scotland spokesman said: “This is a live procurement, so we cannot comment until we have fully considered all the submissions. The next contract to run the Northern Isles ferry services is scheduled to be awarded in Summer 2019, as previously announced.”